The bull market is almost six years old, and the market gains in 2014 took the Dow Jones Industrial Average up 7.5% and the S&P 500 Index up 11.4%. While those index performances do not account for individual stock dividends, Merck & Co. Inc. (NYSE: MRK) closed out 2014 at $56.79, for a gain of 16.9%, including its dividend adjustments.

24/7 Wall St. has undertaken a bullish and bearish case to evaluate both sides of the coin to see what lies ahead for Merck in 2015. One key consideration for the year ahead is that the Big Pharma giant recently acquired Idenix for $3.85 billion to get the smaller company’s hepatitis C pipeline and paid $8.4 billion for Cubist Pharmaceuticals Inc. (NASDAQ: CBST) to gain a stronghold in antibiotics.

The stock has a 2014 trading range of $49.30 to $62.20, and the consensus analyst price target of $63.92 would imply an expected upside of 12.5% by Wall Street analysts this year. Then there is the dividend yield of 3.0% to consider.

Merck had a market cap of $162 billion at the end of the year, and all references to prices in this story reflect the stock’s closing price on December 31, 2014.

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Merck’s two acquisitions are necessary parts of both the bull and the bear case for the company in 2015. Cubist’s Cubicin antibiotic crossed over the $1 billion level in sales last year, and given the climate for hospital acute care, the drug could improve on that sales level substantially.

The downside for Merck is that it is paying cash for both acquisitions and assuming debt of nearly $2 billion in addition to the payouts. A lot is riding on the success of the Idenix and Cubist products, and while Merck hasn’t put all its eggs in the acquisition basket, the company’s sales and profits were lower year-over-year in the third quarter.

Merck’s success in 2015 could depend on the hepatitis C treatment it acquired with Idenix. The primary drug currently used to combat the disease is Gilead’s Sovaldi, which costs about $7,000 a month. Competition from AbbVie and Express Scripts with AbbVie’s Viekira Pak treatment could also hurt the Idenix drug. There are about 3 million hepatitis C sufferers in the United States and an estimated 150 million worldwide.

After a dividend-adjusted performance of 16.9% in 2014, Merck did handily better than the 2.3% or so expected in our 2014 bullish and bearish Dow outlook. Merck’s total expected upside with the dividend included is expected to be 15.5%.

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Merck has put a lot of pieces together in 2014, and it now needs to execute on its strategy in order to make its spending pay off.

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